Solicitation on
Venture Funding for Aquaculture Enterprises

Background

The Feed the Future Bangladesh Aquaculture Activity (BAA) is a five-year project of USAID to intend to improve nutrition through growth in the aquaculture sector.  BAA works in 21 districts of southwestern Bangladesh and two districts in the southeast.

In Bangladesh, the fish value chain is about 3.7% of GDP and about 23% of the total agriculture sector.  The industry is growing at a rate of 3% annually.

As bright as these prospects are, fish farmers, like most farmers, have difficulty raising the money needed to expand their businesses.  Limited access to formal financial services is a significant obstacle to growth for fish farmers and aquaculture enterprises.  While 72% of small & medium sized enterprises have more than one bank account, only 58% of agri-enterprises have even one bank account.  Moreover, about 75% of farmers use mohazon, local informal money lenders.

This use of informal finance indicates that the the financial products available do not meet the farmers' needs, that financial services do not reach the rural areas, that farmers are not qualified for credit (though they can and do save), and / or the farmers do not know about or feel comfortable with formal financial institutions.

Many fish farmers in Bangladesh are looking for investment alternatives.  Option is crowdfunding, a form of equity or loan investments which raises capital from investors via interest-bearing loans or in exchange for shares of the business's operation.

Objective

BAA believes that introducing a venture-funding model (either lending or equity based) into the aquaculture sector will help these enterprises--   fish farmers, market aggregators, hatcheries and nurseries--   expand their business operations and increase earnings. 

BAA would like to form a partnership with a company or organization in the financial sector to develop a venture-funding model appropriate for aquaculture enterprises.

The successful applicant has proven experience and capacity in crowdfunding for agriculture sector or is an expert in equity investment and management.  The partner will:

  • Develop investment readiness of at least 300 aqua-enterprises--  fish farmers, farmers’ groups or cooperatives, aggregators, hatcheries and nurseries--  and provide appropriate compliance, regulatory and legal service, credit & investment scoring, business incubation, and farm business advisory service.
  • Create pipelines of investors both individual and institutional through creative marketing.
  • Develop a venture-funding model (lending or equity based) appropriate the aquaculture enterprises.
  • Connect the investors and aqua-enterprises through a facilitative matchmaking platform (can be tech-based).

Scope of Work

The partner selected present a commercially viable venture-funding business model for aquaculture enterprises. The timeline of the project is 12 months.
 
A clear, professional business plan is required on how the venture-funding model will make the aqua enterprises financially lucrative and investable, connect them with the investors and get some investment rolling within the one-year partnership tenure.
 
Key Deliverables

  • A business plan that clearly describes the following three phases:
    • (1) Develop and increase investment readiness of selected aquaculture enterprises
    • (2) Facilitate crowd-lending and equity investment-based fundraising
    • (3) Investment management support through advisory services
  • Reports on uptake of and investment made by the target groups.
  • Financial and narrative reports
  • Three written business case studies

Who can apply?

Only qualified applicants should apply.  "Qualified" means an established organization with a record of accomplishment in crowdfunding and/or equity investment, especially in agriculture sector.  The organization must have necessary skills in business and financing innovation and be able to contribute to aquaculture sector growth.

Applicants should understand that this is not an offer to hire their services, but rather this is intended to be a partnership.  This means
(A) at least a minimum 50% cost-sharing/investment in this undertaking, and
(B) this activity is intended to be the catalyst for continued work of this kind, and without additional support from BAA so that the partner can continue operation into the future.

Required documentation

If selected for sub-grant financing, the partner will be required to submit:
    • A certificate of incorporation (for individual companies, a trade license);
    • An organogram of key personnel, inclusive of the names of such personnel;
    • Tax Identification Number (TIN);
    • VAT registration number;
    • Proof of a segregated account (providing the name and address of such an account);
    • Other valid papers (provided by government institutions).
    • The percentage of VAT and the total amount of VAT should be mentioned in the proposal.

Submission details

Interested parties should submit a one-page inquiry on the attached form on or before February 28, 2021 either online or via email to wfbanaproject@cgiar.org mentioning the title of solicitation in the subject line.